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OBJECTIVES The aim of this prospective study was to evaluate the diagnostic performance of T2*-weighted magnetic resonance imaging (MRI) to differentiate between acute benign and neoplastic vertebral compression fractures (VCFs). MATERIALS AND METHODS Thirty-seven consecutive patients with a total of 52 VCFs were prospectively enrolled in this IRB approved study. All VCFs were categorized as either benign or malignant according to direct bone biopsy and histopathologic confirmation. In addition to routine clinical spine MRI including at least sagittal T1-weighted, T2-weighted and T2 spectral attenuated inversion recovery (SPAIR)-weighted sequences, all patients underwent an additional sagittal six-echo modified Dixon gradient-echo sequence of the spine at 3.0-T. Intravertebral T2* and T2*ratio (fracture T2*/normal vertebrae T2*) for acute benign and malignant VCFs were calculated using region-of-interest analysis and compared between both groups. Additional receiver operating characteristic analyses were performed. Five healthy subjects were scanned three times to determine the short-term reproducibility of vertebral T2* measurements. RESULTS There were 27 acute benign and 25 malignant VCFs. Both T2* and T2*ratio of malignant VCFs were significantly higher compared to acute benign VCFs (T2*, 30 ± 11 vs. 19 ± 11 ms [p = 0.001]; T2*ratio, 2.9 ± 1.6 vs. 1.2 ± 0.7 [p < 0.001]). The areas under the curve were 0.77 for T2* and 0.88 for T2*ratio, yielding an accuracy of 73% and 89% for distinguishing acute benign from malignant VCFs. The root mean square absolute precision error was 0.44 ms as a measure for the T2* short-term reproducibility. CONCLUSION Quantitative assessment of vertebral bone marrow T2* relaxation times provides good diagnostic accuracy for the differentiation of acute benign and malignant VCFs.